The Type 63 Light Amphibious Tank (LAT) was a light tank with amphibious capability, mainly used during river crossing and amphibious landing operations, in order to destroy enemy beachhead defenses and other materiel, provide infantry fire support, and conduct reconnaissance missions. The vehicle was suitable for operation across rivers, lakes, swamps, and rice fields, as well as other aquatic environments. The Type 63 had a fully amphibious capability, 6 rubber-tired road wheels with the drive sprocket at the rear, idler at the front and no track return rollers, a shallow glacis plate, a trim board folded back onto the glacis plate that was erected at the front of the hull before entering the water and a single-piece driver's hatch cover that had 3 periscopes mounted forward of the hatch. The commander's hatch opened forward and the loader's hatch opened to the rear. A dome-shaped ventilator was mounted in the turret roof to the rear of the commander's and gunner's hatches. The Type 63 had a 4-man crew consisting of the tank commander, driver, gunner and loader. The tank commander sat on the left side of the turret with the gunner on the same side in front of him and the loader to the right.

The tank's overall design took into account the requirements for both land and water operation, and dispensed with features that could not reasonably be incorporated into such a hybrid design. This meant, for instance, that the vehicle featured relatively light armor. Vehicle weight was kept down in other ways, as well, including the use of hollow road wheels. The tank featured an engine with the main powertrain components at the rear, a fighting compartment in the middle to include the vehicle's turret, and a driver's position at the front. The vehicle also featured a water jet propulsion system and trim vane for additional speed and stability when swimming. The vehicle also featured a number of pumps, including manual and powered, and drainage devices to keep water out of the vehicle and otherwise drain standing water after exiting the water.

The tank's main source of power was its Model 12150L-2 4-stroke 12-cylinder v-type water-cooled diesel engine, rated at 294 kilowatts (400 horsepower). On land the vehicle made use of a water cooling system, consisting of a tube-fin-type radiator and exhaust apparatus, which was designed to save power. When traveling in water the vehicle could make use of mezzanine-style heat exchangers. The vehicle's transmission line for operation on land ran from the engine through the main clutch, transmission, steering clutch on both sides, the side-mounted gear reducer. When operating in water it ran through the main clutch, transfer case, and universal joints spread around the sides of waterjets. The main clutch was a dry multi-plate friction type. Optional fuel tanks could also be fitted on top of the hull to increase operational range.

The tank's water propulsion system used axial flow waterjets, one on each side of the vehicle. At the rear of each was a plate that could be opened or closed for water operation or to seal the vehicle on land. The waterjets could be manipulated to make the system function in forward and reverse and could also be used to blow debris from various areas of the vehicle to preventing clogging. Rapid rearward motion in water could be achieved by closing the rear plates and forcing the water out the front of the system.

The tank featured a synchronized gear shift mechanism using fixed-axis mechanical gearbox divided into 2 parts. The front of the gearbox was for the water propelling gear, with the transfer case to the left and right sides of the drive shaft. The waterjet propellers could be run in forward and reverse. The rear portion of the gearbox was for land operation, featuring 5 forward gears and one reverse gear. The gearboxes third, fourth, fifth gear had inertial synchronization, and the second tranche had a simple synchronizer. The first gear and reverse gear were connected with the sliding sleeve shifts. The entire transmission mechanism could also be used independently of each other simultaneously, meaning the tracks and waterjets could function simultaneously, largely for moving from one state to another (leaving and entering the water). The vehicle's steering device used a dry friction multi-plate clutch. On the side of the gear reducer was also a cylindrical gear reduction device. The tank used an independent torsion bar suspension, with single pin fine-pitch metal shoes. The vehicle's track track pattern gave good traction in rice fields, marshes, shoals, and other places where a tank might enter or exit the water and come into contact with soft terrain. The tracks ran over 6 hollow plastic road wheels on each side. The Type 63 could reach speeds of up 64 kilometers per hour on land and 12 kilometers hour while in water. The Type 63 could cross a 2.9-meter trench, mount a 0.87-meter vertical step, climb a 60-percent grade and can ford amphibiously.

The tank featured a welded rolled steel armored hull with angled front, which also served as the mounting point for the vehicle's trim vane. The vehicle also featured a cast and welded turret (cast sections welded together), which was later replaced on upgraded models by a 6-sided welded turret. The welded turret on the basic Type 63 tank had a main armament of an 85mm Type 62-85TC gun and was capable of 360 degree rotation, 4 degrees of depression, and 22 degrees of elevation. The turret was capable of being electrically and manually operated. The tank carried 47 rounds of ammunition for the main gun, which was identical to that in the Type 62 light tank. The main gun could fire armor piercing, armor-piercing high-explosive, high-explosive, and high-explosive anti-tank rounds. The tank also had a secondary armament consisting of a 12.7mm Type 54 machine gun (copy of the Soviet DShK) on the top of the turret for use as an anti-aircraft and anti-personnel weapon, a co-axial 7.62mm Type 59T machine gun, and another Type 59T mounted at the vehicle's bow.

The tank was equipped with a Type 63 gun sight for the main gun and Type 61 and Type 71 viewing devices at the front in the driver's position and at the commander's position. The vehicle also had a Type 59 periscope for use by the gunner. The Type 63 had a infrared driving light on the right side of the hull front and a Chinese designed laser rangefinder (fitted on some models) over the rear part of the 85mm gun. This was identical to the laser rangefinder found on some Chinese Type 59 tanks. Electrical equipment for the tank included 4 batteries, a TJY-1 type relay, and ZFC-3000 DC generator. The system's total voltage was 24 volts and the battery capacity was 280 ampere-hour. Communications equipment included the A-220A radio and A-221A vehicle intercom.

The Type 63 tank was China's first generation of self-developed amphibious tanks. This amphibious tank was designed by the Military Engineering Institute (or MEI) and the No. 60 Research Institute. Design work began in October 1958, and between March and June 1959 2 prototypes were built, identified by the industrial designator WZ-221. After further test modifications and improvements, small batch production began in 1960 and the first vehicles were subsequently delivered troops for trials. During these trials and further testing additional problems were corrected. By May 1962 trials began on 2 finalized test vehicles, including 2,500 kilometers of operation on land and 70 hours in water. These vehicles were sent to the No. 615 Factory for continued research and eventual production in 1963. These prototypes conducted additional tests totaling 2,650 kilometers of operation on land. In March 1963 the design was finalized. After successful testing in rivers, lakes, and sea trials, the vehicle was designated as the Type 63 Light Amphibious Tank and put into mass production. In addition to operation by the PLA, the Type 63 was exported to and had been used by North Korea, Pakistan, Sudan, and Vietnam, among others.

The final Type 63 design effectively mated the turret developed for the Type 62 light tank to a copy of the hull of the Soviet PT-76 light tank. The Type 63's waterjets were copies of the original Soviet design. The hull was similar to the PT-76 apart from a nearly horizontal glacis plate and different engine grills. There were 3 separate vertical slot side inlets on the Type 63, in contrast to the single large inlet with inset vertical baffle plates on the PT-76. The vehicle also served as the basis for the Type 76 armored recovery vehicle, the Type 77 armored personnel carrier (similar to the Soviet BTR-50), the Type 101 and Type 102 oil exploration vehicles, and the Type 89 self-propelled howitzer (also known as the PLZ-89). The Type 76 armored recovery vehicle, developed in 1965, was at base a Type 63 tank with the turret removed and the addition of winches, cranes, a dozer blade, and other features useful for recovering immobilized vehicles under field conditions. The Type 76 could recover vehicles on land or in water and an improved version was introduced in 1976. The Type 101 and Type 102 oil exploration vehicles featured a modified hull and superstructure and lacked combat equipment. These vehicles were intended for oil exploration and delivery of supplies to remote areas.

In addition, in the mid-1990s, the PLA began development of an improved Type 63 tank. The upgrade program included a redesign of the vehicle's hull for longer ship-to-shore operations, as well as a redesigned welded turret featuring an 105mm gun capable of firing armor-piercing fin-stabilized discarding-sabot rounds. The new hull featured a more boat-like appearance and additional floatation cells to handle up to 7 kilometer swims. The new design also featured a laser rangefinder as standard and a fire control system. Initially designated Type 63G, these vehicles were subsequently designated as Type 63A before receiving a new designation ZTS-63A. The final production Type 63A / ZTS-63A tanks featured gun stabilization, satellite navigation, and thermal imaging equipment. These vehicles were fielded to PLA and PLAN Marine units in southeastern China, with the latter being the primary user.

The number of Type 63s in the PLA inventory remained fairly consistent for roughly 15 years at around 1,200 vehicles. In 2002 the Military Balance indicated that the number of Type 63s had declined to around 500 vehicles though the 2003 edition stated that there were some 700 tanks while the 2004 editions stated there were roughly 600 in operation. No explanation for the revisions were offered. The IISS estimate remained unchanged as of 2008, but by 2013, only 200 ZTS-63A were said to remain in operation with the PLA, the PLAN Marine units having phased out the type in favor of the new ZTD-05.